Vodafone group’s capital infusion into Voda Idea inadequate: Analysts

Vodafone Group Plc’s $200 million (about Rs 1,530 crore) infusion into Vodafone Idea Limited (VIL) is grossly inadequate, according to analysts. The struggling telecom operator needs a hefty capital infusion from its promoters at the earliest to clear its massive adjusted gross revenue (AGR) dues and survive, they said.

The latest infusion from Vodafone UK, they said, is not even enough for VIL to make the necessary capital expenditure to maintain a competitive 4G network for countering Reliance Jio Infocomm and Bharti Airtel and holding on to its customers.

VIL faces AGR-based dues of Rs 58,254 crore, of which it paid Rs 6,854 crore to the Department of Telecommunications in three tranches last month.

Nitin Soni, senior director (corporates) at global rating agency Fitch, said the $200 million infusion from Vodafone UK at best offers “a temporary breather for VIL as the latter’s cash generation is barely sufficient to meet interest expenses”.

VIL declined to comment on ET’s queries on the matter.

Last week, Vodafone Plc injected $200 million into VIL as an accelerated payment to boost the cash-strapped telco’s liquidity levels to help it manage operations amid the pandemic

Former Bharti Airtel CEO Sanjay Kapoor said the debate around AGR payouts “is merely in abeyance amid lockdowns and bound to resurface soon” and that the UK co-parent’s $200 million injection is of little consequence to address VIL’s pending payout of statutory dues.

―Business Journal